STEPHENS ENERGY CORP. - The Railroad Commission of Texas

August 1 3,2004
.. Re:
Opting Agtumcnt
Mcwrin~ Station X
Fmmone County, Tuus
The purpose d his lctta agmment rAgramenl") is to set fonh the rgncmcm betwen
- ,
("Point ~ u i and ~ TXU ~ ) Gas . Company (TXU GAS'). concuning 6as
qmlrry. muting. allocalion- nuoeirtcd with gar sources delivering inlo TXU GAS system a! the
Yuinl(s) of Delivery listed on she n~edrcd Exhibit "A" (the 'Rcceipc Poim(s)"). The parties lerett~
recognize thnt Point Dcsignee dclivm gas horn various well sources into sch Rceripl Poim mcter whlcl~
.rcauircr the prformance of varims mentions, which may include, but are not limited lo, measurt:ment
or Ear, pressure control, I~nrp~~ation of gas and qudity analysis by TXU GAS for Point Designee. 11%
sale of pas at tlu Receipt Point meto to various markets, or (he dDvrrvum pooling of 1.1.
Effectivr October I. 2004, in ordcr to clarify requkrncnts associated with various openlic~ns at
the Receipt Point. and in considention of ihe mutual covenants and slgrrmarlt conluncd hcrslr, thc
adqurry and sumciency of which arc hmeby acknowledged, the padies hemto ape as follows:
1. Thc natural gas flowing through tk Raeipt point into TXU GAS' synm must: (a) bc or
men w I v (b) be connnncially fm of dun, guq sum-forming constiwe~s. pwlinc.
wan &any ohm rubrtancc of any kind that may become scpanted ~MIII lllc
pis during tk hnndlin~ thereof or that may cause injury to or interfcrewc with prom opention ot'
thc linu, mdas. rcgula~orr or dkr appliances through which it flows; (c) contain not more then !r
grain of hydrogen sulfide per 100 cubic feet of gar; (d) contain nd mom than 5 grains of tolal sslhr.
including not more than I grain of mereapIan sulht, por 100 cuhic feet of gas; (c) conlain nol mtm
than 2% by volume of carbon dioxide md conlain not more than a told of 4% by volume of ncmhydnx-arbon
Bases. (0 comain not more tbnn 0.05% oxybm: (g) contain a gross heating valve of at
kart 950 British Thenod Units ~BN'') per cubic fwt and not more than 1.100 Btu pa cubic foot: (h)
contain not moru tlun 7 pounds of water vapor per million cubic feet of gas: (i) have a tunpcrature of
not ntorc than 120 degrees Fahrenheit, nor less than 40 degrees Fahrenheit; 6) have r hydrocarbon
dew poinl hclow 40 degrees Frbrrnheit a1 the dclivcry pressure; md (k) have an m~crchm~bility
fmor (wlculatcd by dividing each Btu of gas. saturated with watcr npar at 1 tempenlure ol' 60
dcgwrs Fahrcnl~cil and 11 a pmm of 14.65 psia. by the square mot of the specific gravity of the
gas) that deviates no mom than 7% fmm the interchangeability factor of thc gas con~dned in 'TXU
GAS' ptplinr rstnn at the Recrip Point. Notwithstanding the foregoing, TXU GAS may waivc
Point Lksignee'z ohtigations with regard to maximum Btu content, hydrocarbon dew point itnd